Support

A cookie is a piece of data stored by your browser or device that helps websites like this one recognize return visitors. We use cookies to give you the best experience on think and code.com. Some cookies are also necessary for the technical operation of our website. If you continue browsing, you agree to this site’s use of cookies.

Our Products

think and code provides legal, tax, compliance, government affairs, and government contracting professionals with critical information, practical guidance, and workflow solutions, leveraging leading technology and a global network of experts.

Events

Next marketing services allow clients to elevate their brands and extend their reach through our established and trusted expertise, enhanced with engaging event production, appealing design, and compelling messaging.

Description

Tax Management Portfolio, Partnerships —
Conceptual Overview, No. 710-2nd, provides a conceptual overview
of the federal income tax treatment of partnerships under subchapter K
of the Internal Revenue Code. This includes not only an analysis of the
relevant statutory and regulatory materials, but also the large body of
case law, revenue rulings, and other IRS pronouncements, including
technical advice memoranda and private letter rulings, that are all part
of this complex body of tax law.

The dual nature of a partnership for tax purposes —
at times an aggregation of its partners, and at times an entity —
complicates partnership taxation, particularly because no one, including
the author, has been able to articulate a comprehensive statement of
when the aggregate aspect and when the entity aspect should predominate.
The Portfolio highlights some of the major applications of the
aggregate and entity principles in partnership taxation, as an
orientation to the principles and structure of Subchapter K, as well as a
basis for analyzing partnership problems, for which the authorities
provide little meaningful guidance. Partnership taxation is further
muddled by the fact that a “tax” partnership includes not only entities
organized as general or limited partnerships under state law, but also
the newer forms: limited liability partnerships, primarily for
professionals, and limited liability companies.

Because most partnership law is a matter of contract
among the parties, a major characteristic of the partnership form is its
flexibility. Partnership tax principles respect and accommodate that
business flexibility, but flexibility can also lead to abuse.
Predictably, the Code, the regulations, the IRS, and the courts limit
the flexibility. The Portfolio addresses the resulting strains on the
application of the aggregate and entity principles, as well as other
principles.

The Portfolio examines tax partnerships in detail,
distinguishing them from other business relationships. This issue has
been simplified by the “check-the-box” regulations that became effective
in 1997, and that now allow unincorporated
organizations to elect whether to be taxed as partnerships or as
associations taxable as corporations. This choice is not available for
business entities that are organized as corporations under state law, or
for publicly traded partnerships. Special rules apply for foreign
entities. Because they remain relevant for controversies involving
earlier years, the partnership classification criteria that applied
before the check-the-box regulations became effective are summarized. At
the other end of the spectrum, partnerships must be distinguished from
other relationships that may not constitute business entities, including
co-ownership of property, sharing of expenses, and pooling
arrangements, as well as employer-employee, debtor-creditor,
seller-purchaser, and lessor-lessee relationships. When these other,
often informal, arrangements provide for the sharing of profits, they
may resemble partnerships. The check-the-box regulations do not apply to
these determinations, because they relate to the classification of
business entities rather than the determination of whether an
arrangement is a business entity. The factors used in determining
whether these arrangements are tax partnerships do not necessarily focus
on why Subchapter K, or other partnership provisions, should apply. In
addition, the election that allows some tax partnerships to be excluded
from certain partnership tax provisions is considered.

The Portfolio also provides a general overview of the
major federal income tax aspects of conducting business operations
through a tax partnership, in the form of a summary statutory outline of
the mechanics of partnership taxation, as provided in the Code,
regulations, IRS materials, and cases, with an emphasis on the
application of aggregate and entity principles. In doing so, it surveys
partnership operations according to the following outline: (1)
partnership operations generally, and, more specifically, (a) allocating
the results of partnership operations among the partners, including
according to the special allocation rules, and principles relating to
operations financed with nonrecourse liabilities, (b) partnership
liabilities, including the allocation of recourse and nonrecourse
liabilities, and (c) transactions between partners and partnerships; (2)
contributions of property or services by partners, as well as other
transactions between partners and partnerships, in properties, and
services, including the disguised sale and disguised compensation rules;
(3) distributions by partnerships to partners, whether during
operations, or in liquidation of the interest of a withdrawing or
deceased partner, with an emphasis on the unique nonrecognition
provisions; and (4) disposition of partnership interests or partnership
businesses, and termination of the partnership.

All think and code treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from think and code’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to [email protected].

Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)

Notify me when updates are available (No standing order will be created).

This think and code report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to [email protected].

Put me on standing order

Notify me when new releases are available (no standing order will be created)